US, Mexico avert trade war over tomatoes

Thanks to a tentative agreement the US and Mexico have narrowly averted a potentially disruptive trade war between the two countries.

Under the agreement reached late Saturday, the minimum sale price for Mexican tomatoes would increase in the US, and strengthen compliance and enforcement. The types of The types of tomatoes governed by the bilateral pact will also increase to four from one.

''The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products, and accounts for changes that have occurred in the tomato market since the signing of the original agreement,'' Francisco J Sánchez, the US under secretary of commerce for international trade, said in a statement.

The agreement which would be open for public comment until 11 February is expected to come into effect from 4 March according to the commerce department.

According to estimates, nearly half the tomatoes consumed in the US come from Mexico. Last fall saw Florida tomato growers urge the commerce department to end a 16-year-old agreement that had suspended an antidumping investigation that started in the mid-1990s.

Though the agreement had been amended several times over the years, Florida growers contend it set the minimum price of Mexican tomatoes so low that the Florida growers could not compete.